Contractor and Client Relations to Assure Process Safety

ACCPS CONCEPT BOOK

William F. Early, I1 Early Consulting, L.C.

Houston, Texas

CENTER FOR CHEMICAL PROCESS SAFETY of the

AMERICAN INSTITUTE OF CHEMICAL ENGINEERS 345 East 47th Street, New York, New York 10017

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Contractor and Client Relations

to Assure Process Safety

Publications Available from the CENTER FOR CHEMICAL. PROCESS SAFETY

of the A M E R I C . INSTITUTE OF CHEMICAL. ENGINEERS

Inherently Safer Chemical Processes: A Life Cycle Approach Contractor and Client Relations to Assure Process Safety Guidelines for Use of Vapor Cloud Dispersion Models, Second Edition Guidelines for Evaluating Process Plant Buildings for External Explosions and Fires Guidellines for Writing Effective Operating and Maintenance procedures Guidelines for Chemical Transportation k s k Analysis Guidelines for Safe Storage and Handling of Reactive Materials Guidelines for Technical Planning for On-Site Emergencies Guidelines for Process Safety Documentation Guidelines for Safe Process Operations and Maintenance Guidelines for Process Safety Fundamentals in General Plant Operations Guidelines for Chemical Reactivity Evaluation and Application to Process Design Tools for Malung Acute Risk Decisions with Chemical Process Safety Applications Guidelines for Preventing Human Error in Process Safety Guidelines for Evaluating the Characteristics of Vapor Cloud Explosions, Flash Fires. and

Guidelines for Implementing Process Safety Management Systems Guidelines for Safe Automation of Chemical Processes Guidelines for Engineering Design for Process Safety Guidelines for Auditing Process Safety Management Systems Guidelines for Investigating Chemical Process Incidents Guidelines for Hazard Evaluation Procedures, Second Edition with Worked Examples Plant Guidelines for Technical Management of Chemical Process Safety, Rev. Ed. Guidelines for Technical Management of Chemical Process Safety Guidelines for Chemical Process Quantitative Rsk Analysis Guidelines for Process Equipment Reliability Data, with Data Tables Guidelines for Vapor Release Mitigation Guidelines for Safe Storage and Handling of High Toxic Hazard Materials Understanding Atmospheric Dispersion of Accidental Releases Expert Systems in Process Safety Concentration Fluctuations and Averaging Time in Vapor Clouds Safety, Health, and Loss Prevention in Chemical Processes: Problems for Undergraduate

Safety, Health, and Loss Prevention in Chemical Processes: Problems for Undergraduate

Proceedings of the International Conference and Workshop on Modeling and fitigating the

Proceedings of the International Symposium and Workshop on Safe Chemical Process

Proceedings of the International Process Safety Management Conference and Workshop, 1993 Proceedings of the International Conference on Hazard Identification and Risk Analysis,

Proceedings of the International Conference/Workshop on Modeling and Mitigating the

Proceedings of the International Symposium on Runaway Reactions, 1989 CCPS/AIChE Directory of Chemical Process Safety Services

BLEVEs

Engineering Curricula

Engineering Curricula-Instructors Guide

Consequences of Accidental Releases of Hazardous Materials, 1995.

Automation, 1994

Human Factors, and Human Reliability in Process Safety, 1992

Consequences of Accidental Releases of Hazardous Materials, 1991.

Contractor and Client Relations to Assure Process Safety

ACCPS CONCEPT BOOK

William F. Early, I1 Early Consulting, L.C.

Houston, Texas

CENTER FOR CHEMICAL PROCESS SAFETY of the

AMERICAN INSTITUTE OF CHEMICAL ENGINEERS 345 East 47th Street, New York, New York 10017

Copyright 0 1996 American Institute of Chemical Engineers 345 East 47th Street New York, New York 10017

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the copyright owner.

Library of Congress Cataloging-in Publication Data Contractor and Client Relations to Assure Process Safety

P. cm. Includes bibliographical references and index. ISBN 0-81694667-X 1. Chemical processes-Safety measures. 2. Contractors

operations. 3. Industrial safety. 1. American Institute of Chemical Engineers. Center for Chemical Process Safety. TP149.C66 1996 660 .068Mc20 94-2481

This book is available at a special discount when ordered in bulk quantities. For information, contact the Center for Chemical Process Safety of the American Institute of Chemical Engineers at the address shown above.

It is sincerely hoped that the information presented in this document will lead to an even more impressive safety record for the entire industry; however, the American Institute of Chemical Engineers, its consultants, CCPS subcommittee members, their employers, their employers officers and directors, and Early Consulting, L.C. disclaim making or giving any warranties or representations, express or implied, including with respect to fitness, intended purpose, use or merchantability and/or correctness or accuracy of the content of the information presented in this document. As between (1) the American Institute of Chemical Engineers, its consultants, CCPS subcommittee members, their employers, their employers officers and directors, and Early Consulting, L.C. and (2) the user of this document, the user accepts any legal liability or responsibility whatsoever for the consequence of its use or misuse.

CONTENTS

1. INTRODUCTION

1.1. ObjectiveBcope 1.2. Organization of This Book 1.3. Introduction to Terminology 1.4. The Contract Opportunity 1.5. References

2. CONTRACTOR SAFETY PROGRAMS: GENERAL

2.1. Introduction 2.2. Safe Work Practices 2.3. Contractor Qualification 2.4. Documentation 2.5. References

3. OSHA PSM AND THE EPC CONTRACTOR

3.1. Project Planning under OSHAPSM 3.2. PSMElements 3.3. Checkhst Basis for PSMProject Plan 3.4. References

4. SUBCONTRACTOR RELATIONSHIPS

4.1. Introduction 4.2. Seamless Interfaces

11

11 12 16 19 21

23

24 26 35 40

43

44 44

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CONTENTS vi

4.3. Shared Labilities 4.4. Direct Contract Employees 4.5. References

5. MANAGING CLIENT-CONTRACTOR RISK

5.1. Introduction 5.2. Indemnification 5.3. Consequential Damages 5.4. Differing Conditions 5.5. Delays 5.6. At torney-Client Privilege 5.7. Trust 5.8. References

APPENDIX A. CONTRACTOR CHECKLISTS

APPENDIX 6. STANDARDIZED PREQUALlFlCATlON FORM (PQF)

47 48 49

51

51 54 55 55 57 57 58 59

61

71

PREFACE

The Center for Chemical Process Safety (CCPS) was established in 1985 by the American Institute of Chemical Engineers (AIChE) for the express purpose of assisting the Chemical and Hydrocarbon Processing Industries in avoiding or mitigating catastrophic chemi- cal accidents. To achieve this goal, CCPS has focused its work on four areas:

0 establishing and publishing the latest scientific and engineer- ing practices (not standards) for prevention and mitigation of incidents involving toxic and/or reactive materials;

0 encouraging the use of such information by dissemination through publications, seminars, symposia and continuing education programs for engineers;

0 advancing the state-of-the-art in engineering practices and technical management through research in prevention and mitigation of catastrophic events; and

0 developing and encouraging the use of undergraduate educa- tion curricula which will improve the safety knowledge and consciousness of engineers.

The current book, Contractor and Client Relations to Assure Process Safety, is intended to identify issues between the Contractor and his Client which should be addressed; particularly those which may affect process safety. These issues may arise at any stage during the life of a process facility. This book is concerned with resolving those

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